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Moody’s Investors Service has reduced its outlook for the chemical industry because of the economic effects of the novel coronavirus. The bond rating agency expects pretax chemical earnings to fall by over 20% on average this year versus 2019. It had predicted a 10% decline in April. The firm warns that its outlook could slip even further if the economy proves slow to recover. “Demand in the Americas and EMEA [Europe, the Middle East, and Asia] held up well through the first quarter for many companies, but a severe downturn is likely for May and June, especially for commodities and plastics for industrial applications,” a Moody’s report says. The firm is not optimistic about companies like Celanese, Covestro, and Huntsman, which have high exposure to autos, capital goods, and construction. Firms serving consumer packaging and medical markets are better positioned, it says. The report points out that Western producers’ Chinese operations had returned to full capacity by April—“a potential indicator of what could occur in the European and North American chemical sectors in the coming months.”